Manufacturers urged to grab the quota lifeline ‘Get competitive – or risk closure’

JOY ORLEK POSITIVE REACTION from all sides of the spectrum greeted last week’s announcement of a postponement by the Trade and Industry Department (dti) of the implementation date for new quotas on clothing and textile imports from China. The quotas will take effect on January 1, 2007 instead of the original September 28 date. The national treasury has warned clothing manufacturers to use the respite to become competitive, or risk eventual closure. Quoted in Business Report, Lesetja Kganyago, the treasury director-general, said the quotas were a necessary industrial policy intervention and not a change in economic policy. Earlier this month the dti gazetted 31 items on which restrictions would be imposed on imports from China, attracting strong criticism from retailers who saw their Christmas sales imploding if the restrictions came into force at such short notice. A meeting between dti and several stakeholders focused on the need for longer lead times, the methodology for quota allocation, and domestic supply issues, the department said. According to BuaNews, parties agreed that a delay in implementation would go some way to enabling all the players in the value chain to put in place arrangements to enable the industry to adjust to the restrictions and take advantage of the resulting opportunities.